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Home   The Ambassador Canada's chief representatives to the U.S. Michael Kergin Ambassador Kergin's Letters April 7, 2004
501 Pennsylvania Avenue, N.W.
Washington, D.C. 20001
April 7, 2004 The Honorable Charles E. Grassley
United States Senate
Chair, Senate Finance Committee
328 Senate Hart Office Building
Washington, D.C. 20510 The Honorable Max Baucus
United States Senate
Ranking Member, Senate Finance Committee
511 Senate Hart Office Building
Washington, D.C. 20510 Dear Senator Grassley and Senator Baucus, I am writing to you as sponsors of the Senate FSC-ETI bill (S. 1637) which also includes energy tax incentives. First, may I commend you on your efforts to advance the FSC-ETI bill which will bring the USA into compliance with its WTO obligations. On the issue of new energy legislation, the Congress has devoted much effort in this session to develop such legislation which if enacted could further US energy priorities as well as develop the entire North American energy market. As you know, Canada and the United States have a strong, extensive, highly integrated energy relationship. Canada is by far the largest and most secure, supplier of energy to the United States. On September 12, 2003, I wrote to the Chairs of the Senate Energy Committee and the House Energy and Commerce Committee to convey Canada's views on elements of the proposed energy legislation which would have a significant impact on the North American energy market, particularly as they would affect Canada. I am pleased that in working with your colleagues in Congress, language was found that reflected our mutual interests. This language was included in the Senate-House Conference Report for H.R. 6. I was most disappointed that the new Senate energy bill (S. 2095) introduced in February resuscitated, as part of its tax incentives title, a price floor of $1.35 for any Alaska natural gas pipeline. This tax incentives title has now been included in the FSC-ETI bill. I would ask you to reconsider the provision of a price floor. This proposal was opposed by Canada in previous versions of the energy bill. Our opinion has not changed. Canada welcomes private sector plans to build new natural gas pipelines from Alaska's North Slope and Canada's Mackenzie Delta. However, we are of the view that both pipelines should be built without subsidies and without the route being determined by legislation. Subsidies, especially a price floor, would distort the North American natural gas market, to the detriment of Lower 48 and Canadian producers. My staff and I remain at your disposal to provide any supplementary information that you may require. Yours sincerely,
Michael Kergin
Ambassador cc: The Honorable Spencer Abraham, Secretary of Energy
The Honorable William Frist, United States Senate
The Honorable Tom Daschle, United States Senate
The Honorable Pete Domenici, United States Senate
The Honorable Jeff Bingaman, United States Senate
The Honorable Joe Barton, United States House of Representatives
The Honorable John Dingell, United States House of Representatives
The Honorable Ralph Hall, United States House of Representatives
The Honorable Rick Boucher, United States House of Representatives
The Honorable William Thomas, United States House of Representatives
The Honorable Charles Rangel, United States House of Representatives | 
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